Stock Market News

Eurozone business activity solid, but ECB needs more than words

Growth in business activity in the Eurozone accelerated at its fastest pace in almost three years in April, according to the preliminary purchasing managers' index (PMI) published on Wednesday by Markit, although these experts warned that dropping prices fan the fears of deflation.

The PMI composite output index, which includes both the services and manufacturing sectors, rose to 54.0, from the prior 53.1. That beat consensus estimates for no change and clocked in at its highest level since May 2011.

The manufacturing PMI edged up only slightly to 53.3 from the prior 53, compared to analysts' expectations that the reading would remain stable.

The services PMI jumped to 53.1, from the prior 52.2, beating consensus forecast for a smaller increase to 52.4.

Germany continued to lead the upturn with France merely managing to stabilise.

Amidst the positive news for the region was the return to job creation. Markit Chief Economist Chris Williamson characterised it as "very encouraging news" and said it implied that companies believe that "recovery has legs and is looking increasingly sustainable".

Williamson confirmed that the Eurozone has started the second quarter "on a solid footing" and forecasts that gross domestic product growth would rise by 0.5% this quarter, compared to the 0.4% rise in the first three months of the year.

However, he warned that prices continue to be a key concern: "With selling prices falling at the fastest pace since last August despite the upturn in activity, there will be growing fears that deflationary pressures are intensifying and that the European Central Bank (ECB) needs to respond with more than just words to the recent appreciation of the exchange rate."

Stock News is provided by Digital Look Corporate Solutions from Sharecast news.
Please read the terms and conditions of useage of this data. Republication or redistribution of content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Digital Look Ltd.

Get a free widget for your website with our latest headlines.

You can now add our live prices and new headlines to your website.The news widget features quotes for Oil prices, spot Gold price and Indices plus a choice of news channel for healines.